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Code of Federal Regulations Pertaining to ESA

Title 29  



Chapter V  

Wage and Hour Division, Department of Labor



Part 525  

Employment of Workers With Disabilities Under Special Certificates

29 CFR 525.12 - Terms and conditions of special minimum wage certificates.

  • Section Number: 525.12
  • Section Name: Terms and conditions of special minimum wage certificates.

    (a) A special minimum wage certificate shall specify the terms and 
conditions under which it is granted.
    (b) A special minimum wage certificate shall apply to all workers 
employed by the employer to which the special certificate is granted 
provided such workers are in fact disabled for the work they are to 
    (c) A special minimum wage certificate shall be effective for a 
period to be designated by the Administrator. Workers with disabilities 
may be paid wages lower than the statutory minimum wage rate set forth 
in section 6 of FLSA only during the effective period of the 
    (d) Workers paid under special minimum wage certificates shall be 
paid wages commensurate with those paid experienced nondisabled workers 
employed in the vicinity in which they are employed for essentially the 
same type, quality, and quantity of work.
    (e) Workers with disabilities shall be paid not less than one and 
one-half times their regular rates of pay for all hours worked in excess 
of the maximum workweek applicable under section 7 of FLSA.
    (f) The wages of all workers paid a special minimum wage under this 
part shall be adjusted by the employer at periodic intervals at a 
minimum of once a year to reflect changes in the prevailing wages paid 
to experienced individuals not disabled for the work to be performed 
employed in the vicinity for essentially the same type of work.
    (g) Each worker with a disability and, where appropriate, a parent 
or guardian of the worker, shall be informed, orally and in writing, of 
the terms of the certificate under which such worker is employed. This 
requirement may be satisfied by making copies of the certificate 
available. Where a worker with disabilities displays an understanding of 
the terms of a certificate and requests that other parties not be 
informed, it is not necessary to inform a parent or guardian.
    (h) In establishing piece rates for workers with disabilities, the 
following criteria shall be used:
    (1) Industrial work measurement methods such as stop watch time 
studies, predetermined time systems, standard data, or other measurement 
methods (hereinafter referred to as ``work measurement methods'') shall 
be used by the employer to establish standard production rates of 
workers not disabled for the work to be performed. The Department will 
accept the use of whatever method an employer chooses to use. However, 
the employer has the responsibility of demonstrating that a particular 
method is generally accepted by industrial engineers and has been 
properly executed. No specific training or certification will be 
required. Where work measurement methods have already been applied by 
another employer or source, and documentation exists to show that the 
methods used are the same, it is not necessary to repeat these methods 
to establish production standards.
    (i) The piece rates shall be based on the standard production rates 
(number of units an experienced worker not disabled for the work is 
expected to produce per hour) and the prevailing industry wage rate paid 
experienced nondisabled workers in the vicinity for essentially the same 
type and quality of work or for work requiring similar skill. 
(Prevailing industry wage rate divided by the standard number of units 
per hour equals the piece rate.).
    (ii) Piece rates shall not be less than the prevailing piece rates 
paid experienced workers not disabled for the work doing the same or 
similar work in the vicinity when such piece rates exist and can be 
compared with the actual employment situations of the workers with 
    (2) Any work measurement method used to establish piece rates shall 
be verifiable through the use of established industrial work measurement 
    (i) If stop watch time studies are made, they shall be made with a 
or persons whose productivity represents normal or near normal 
performance. If their productivity does not represent normal or near 
normal performance, adjustments of performance shall be made. Such 
adjustments, sometimes called ``performance rating'' or ``leveling'' 
shall be made only by a person knowledgeable in this technique, as 
evidenced by successful completion of training in this area. The persons 
observed should be given time to practice the work to be performed in 
order to provide them with an opportunity to overcome the initial 
learning curve. The persons observed shall be trained to use the 
specific work method and tools which are available to workers with 
disabilities employed under special minimum wage certificates.
    (ii) Appropriate time shall be allowed for personal time, fatigue, 
and unavoidable delays. Generally, not less than 15% allowances (9-10 
minutes per hour) shall be used in conducting time studies.
    (iii) Work measurements shall be conducted using the same work 
method that will be utilized by the workers with disabilities. When 
modifications such as jigs or fixtures are made to production methods to 
accommodate special needs of individual workers with disabilities, 
additional work measurements need not be conducted where the 
modifications enable the workers with disabilities to perform the work 
or increase productivity but would impede a worker without disabilities. 
Where workers with disabilities do not have a method available to them, 
as for example where an adequate number of machines are not available, a 
second work measurement should be conducted.
    (i) Each worker with a disability employed on a piece rate basis 
should be paid full earnings. Employers may ``pool'' earnings only where 
piece rates cannot be established for each individual worker. An example 
of this situation is a team production operation where each worker's 
individual contribution to the finished product cannot be determined 
separately. However, in such situations, the employer should make every 
effort to objectively divide the earnings according to the productivity 
level of each individual worker.
    (j) The following terms shall be met for workers with disabilities 
employed at hourly rates:
    (1) Hourly rates shall be based upon the prevailing hourly wage 
rates paid to experienced workers not disabled for the job doing 
essentially the same type of work and using similar methods or equipment 
in the vicinity. (See also Sec. 525.10.)
    (2) An initial evaluation of a worker's productivity shall be made 
within the first month after employment begins in order to determine the 
worker's commensurate wage rate. The results of the evaluation shall be 
recorded and the worker's wages shall be adjusted accordingly no later 
than the first complete pay period following the initial evaluation. 
Each worker is entitled to commensurate wages for all hours worked. 
Where the wages paid to the worker during pay periods prior to the 
initial evaluation were less than the commensurate wage indicated by the 
evaluation, the employer must compensate the worker for any such 
difference unless it can be demonstrated that the initial payments 
reflected the commensurate wage due at that time.
    (3) Upon completion of not more than six months of employment, a 
review shall be made with respect to the quantity and quality of work of 
each hourly-rated worker with a disability as compared to that of 
nondisabled workers engaged in similar work or work requiring similar 
skills and the findings shall be recorded. The worker's productivity 
shall then be reviewed and the findings recorded at least every 6 months 
thereafter. A review and recording of productivity shall also be made 
after a worker changes jobs and at least every 6 months thereafter. The 
worker's wages shall be adjusted accordingly no later than the first 
complete pay period following each review. Conducting reviews at six-
month intervals should be viewed as a minimum requirement since workers 
with disabilities are entitled to commensurate wages for all hours 
worked. Reviews must be conducted in a manner and frequency to insure 
payment of commensurate wages. For example, evaluations
should not be conducted before a worker has had an opportunity to become 
familiar with the job or at a time when the worker is fatigued or 
subject to conditions that result in less than normal productivity.
    (4) Each review should contain, as a minimum and in addition to the 
data cited above, the following: name of the individual being reviewed; 
date and time of the review; and, name and position of the individual 
doing the review.
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